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U.S. Supreme Court

Connecticut Railway, & Lighting Co. v. Palmer, 305 U.S. 493 (1939)

Connecticut Railway, & Lighting Co. v. Palmer

No. 63

Argued November 10, 14, 1938

Decided January 3, 1939

305 U.S. 493


1. Review by certiorari is limited to the grounds upon which the writ was sought and allowed. A ruling to which there was but a mere reference in the petition, without request for review, not considered. P. 305 U. S. 496.

2. The measure of damages upon rejection of a lease in a railroad reorganization proceeding under § 77 of the Bankruptcy Act, as amended Aug. 27, 1935, is the actual damages determinable as in equity proceedings and upon evidence. The Act fixes no limit to the amount of actual damages. Only such damages as are susceptible of definite, satisfactory proof may be allowed. Pp. 305 U. S. 497-503.

The provisions of the Act with respect to such claims in railroad reorganization are compared with those limiting like claims against individual debtors and in general corporate reorganization.

3. The conclusion that, in a railroad reorganization proceeding under § 77 of the Bankruptcy Act as amended, upon rejection of a lease with 969 years still to run, the lessor's damages were limited to the rent accrued, up to the latest practicable date in the reorganization for presentation of its claim, diminished by the net earnings of the property -- thus barring proof of damages for loss of rent falling due after that date, and destroying, by operation of subdivision (f), the right of further recovery for such injury from the debtor after reorganization -- held erroneous. Id.

4. Improvements and sinking funds which came into the possession of the lessor by the terms of the lease held not to be considered as offsets against the claim of the lessor herein. P. 305 U. S. 505.

5. Section 63(a)(9) of the Bankruptcy Act held inapplicable to the present controversy. P. 305 U. S. 506.

95 F.2d 483 reversed.

Certiorari, post, p. 584, to review a decree which modified and affirmed a decree of the bankruptcy court determining a claim arising out of the rejection of a lease in a proceeding under § 77 of the Bankruptcy Act. chanrobles.com-red

Page 305 U. S. 494